Private Property, “TINA” and “You didn’t build that”

Yet another classic* Jane the Actuary rambling “thinking through an idea” type of post.

(* If a 6 month old blog could be said to have any “classic” kind of post.)

This is something I was thinking through a while back, and wanted to try to set out in a provisional form.

Fundamentally, there are basic human rights that are considered to be a part of “natural law” (to use the philosophical/theological term), such as free speech, freedom of religion, and so forth. But is the right to own private property among them? Consider the eastern Nebraska farm my father owns. He inherited it from his mother, who inherited it from her father, and his father before that was a homesteader. Reportedly remnants of the old sod house were still visible the last time dad was there. And where did he get it from? The U.S. government, who stole/purchased/won it from the Indians/Native Americans fair-and-square, depending on your point of view. And of course, the Indians were not just some monolithic group; various Indian groups lived there at different times, either migrating away or pushing others out.

Is property ownership a matter of first-come first-served? That doesn’t seem fair for the generations which follow. Or is it a matter of the strongest winning out? Not much better.

There is no intrinsic reason why any one individual has a right to own a piece of farmland, or a city lot. And at different times and places that’s been reflected in different attitudes toward property ownership: yes, the bit that Indians didn’t make a fuss over white settlers because, after all, no one “owned” the land, in their view. (Though I’d read recently that a bigger element was that the East coast Indian settlements had been devastated by disease in the time period immediately prior to the arrival of the English, so there weren’t reasons for land disputes.) But also the fact that one impediment to development in Africa has been that property-owning laws don’t really point the way towards particular individuals holding clear title over plots of land.

And this brings me to Margaret Thatcher’s “there is no alternative” — the classic phrase she used frequently to persuade her opponents that, for all its flaws, a market economy and economic liberalism is the only economic system that will, in the end, provide growth and development and meet its citizens’ needs, a phrase ultimately abbreviated to “TINA.”  See the Wikipedia article and a more recent article that David Cameron is reviving this phrase in the U.K. for more context.

Bottom line:  TINA means supporting free enterprise, and everything that goes along with it, not because it’s “fair” but because it works, when alternative economic systems don’t, but also requires an acknowledgement that the system is a construct, a way of organizing society and the economy, not a “natural” and immutable one.

So where does that get us?

Not to Elizabeth Warren and Barack Obama’s “You didn’t build that” formulation.

You remember that one, right?  Wikipedia helpfully gives the full quotes:

First, Warren, in August 2011:

I hear all this, you know, ‘Well, this is class warfare, this is whatever.’ No. There is nobody in this country who got rich on his own — nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.

Then, Obama, on July 13, 2012, clearly taking Warren’s notion and putting his own spin on it:

There are a lot of wealthy, successful Americans who agree with me – because they want to give something back. They know they didn’t – look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something – there are a whole bunch of hardworking people out there. (Applause.)

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.

Warren’s formulation is one of a “social contract” — but she creates a straw man, an opponent who disagrees with basic obligation to support core government services, when her opponents legitimately disagree with her on the subject of the size of that obligation and the consequent taxes.

And Obama goes further: “Someone else made that happen” vs. “you didn’t do this entirely on your own.” Obama is far more collectivist; in his version, it’s not intelligence or hard work that enables some to get ahead, it’s luck. (Maybe the fact that he got ahead through, indeed, luck and the good fortune of others latching onto him, colors his perception.) He really removes individual achievement entirely — and I don’t think it’s as simple as misspeaking, though the entire statement feels as clouded as if he’s trying to recall Warren’s lines, and stumbling through them.

(Incidentally, his line that “government research created the Internet so that all the companies could make money off the Internet” is a bit flaky as well: government research created the Internet as a part of building up national defense capabilities, without any inkling that it would be so transformative for commerce.)

In practice, the lines of disagreement generally are as much about what functions best as what’s “fairest” — is it fair to tax the wealthy disproportionately more, because they can afford it? Yes. Is it unfair to tax the wealthy excessively, to the point where half or more of their marginal earnings are paid to the State? Yes. Does it feel particularly egregious when it’s an individual who has invented, created, started a business, worked long hours, etc., rather than hitting the CEO lottery or the hefty paychecks of pro athletes? Yes. But more importantly — what’s best for the long-term health of the economy?

Anyway, the reason why I’m writing this is as a sort of preface to something I want to work out over the next couple days, a sort of “Jane the Actuary plays Jane the Futurist.” What happens to our society if current trends intensify and our economy moves into a world we don’t recognize now?